Transcript Social assistance reform in post

Social assistance reform in
post-economic crisis Korea:
The policy-making process of the
National Basic Livelihood Security Act
In-Young Jung
University of York
[email protected]
Aim
• To explicate the driving forces of the social
assistance reform in post-economic crisis
Korea
• Focusing on the policy-making process of
the National Basic Livelihood Security Act
of 1999
The Structure of this presentation
• Introduction
• Economic crisis & social assistance reform
in Korea
• Changing the structures of social assistance
• The policy-making process
• Conclusions
Introduction
• In 1999, social assistance in Korea which had
had a Poor Law tradition for forty years was
finally reformed
=> The National Basic Livelihood Security
(NBLS) Act of 1999 that protects
fundamental human rights, was enacted
• The law-making process of the NBLS Act
was led by NGOs, not by the Govt
Economic crisis and
social assistance reform in Korea
• Korea achieved impressive economic
performance under the Developmental State
(Gough, 2001).
• Unemployment and poverty had never been
issues in Korean society.
Before the economic crisis of 1997
• Average unemployment rate – 3.2%
• Average Gini coefficient – 0.29
• Absolute poverty rate in 1996 – 3.1%
• Relative poverty rate in 1996 – 11%
(NSO, 2001a; Park and Kim, 1998; Park et al, 2002)
• The economic crisis had an important role in
provoking public awareness of the poverty
problem and the necessity for reform of the
existing social safety net.
Trends in unemployment and poverty in Korea
Source: NSO (2001b); Park (2000)
14
12.6
Percentage
12
10.9
10
9.9
6.8
6
2
9.7
8.6
8
4
12.2
6.4
4.9
3.1
2
5.7
4.8
9.4
4.1
2.6
0
1996
1997
1998
1999
Feb.
Poverty rate
May.
Aug.
Dec.
Unemployment rate
2000
Number of social assistance beneficiaries (in
thousands, rounded). Source: MOHW (2004);
Moon (2003)
1997
1998
1999
2000
2001
Total
beneficiaries (A)
1,410
1,470
1,920
1,490
1,420
Cash assistance
beneficiaries (B)
370
440
540
1,490
1,420
Total population
(C)
45,954 46,287 46,617 47,008 47,343
A/C (%)
3.1
3.2
4.1
3.1
3.0
B/C (%)
0.8
0.9
1.2
3.1
3.0
Income distribution in Korea (%) Source:
NSO (2001a)
1st-3rd
4th-7th
8th-10th Gini Coef
1995
14.7
35.3
49.8
0.284
1996
14.3
35.3
50.4
0.291
1997
14.6
35.8
49.7
0.283
1998
13.2
34.6
52.1
0.316
1999
13.1
34.3
52.6
0.320
In the wake of the 1997 crisis
• Unemployment & poverty - a main social
agenda needing urgent resolution
• Sharp increase in crime, divorce and suicide
• Considerable increase in homeless people
=> A threat to socio-political instability
The negative social impact has become greater
due to the relative neglect of the development
of institutions for social protection during the
decades of economic development.
⇒ The Govt was continually and strongly
requested by the IMF and civil society to
establish an adequate social safety net
Coping with the problems of soaring
unemployment and poverty
• In 1998, unemployment benefit coverage
was expanded to cover all workplaces
including temporary or part-time workers
but excluding day workers
• In 1999, a new social assistance law, the
NBLS Act, which aims to secure minimum
living standards for those eligible regardless
of their age and ability to work, was enacted
Changing the structures of social
assistance
• Benefits provided on the basis of social
rights as a part of citizenship
• The demographic condition, under 18 and
65 and over, was abolished
• Housing Benefit has been newly established
in the NBLS system
Work incentives
• Recipients for the NBLS system are required to
seek work and are offered incentives to work
• Recipients capable of work required to participate
in the Self-Reliance Assistance services
• Earnings disregards, which incomes generated by
labour activities are partly deducted during income
assessment procedures, are projected to be
enforced nationwide in Korea from 2004
Benefit scale levels
• Based on the minimum living standards,
which is defined as a ‘minimum cost of
living’ required for citizens to maintain
sound and civilized lives
• Surveyed every three years from 2004
• The results are publicly announced
The benefit rates
• To be set so that the total income of each
household receiving social assistance benefits
reaches the minimum cost of living
• In 2001, the minimum living cost was 49 per cent
of the average consumption expenditure of urban
households (MOHW, 2001)
Expenditure on social assistance (billion
won). Source: MOHW (2004)
1998
1999
2000
2001
2003
LP/NBLS (A)
1,090
1,848
2,332
3,243
3,523
Social security
(B)
4,576
6,105
8,074
10,746
11,572
Gov. budget (C) 75,583 83,685
88,736 99,180 118,132
A/B (%)
23.8
30.3
28.9
30.2
30.4
A/C (%)
1.4
2.2
2.6
3.3
3.0
A/GDP (%)
0.2
0.4
0.5
0.6
0.6
The policy-making process of the NBLS
Act
• The Social Welfare Committee, under the
PSPD, has pursued gradual, practical, and
policy-oriented approaches to raise concrete
points of issues, since its foundation in 1994.
• The spirit and the point of the NBLS Act
originated from the professional-centred
‘national minimum movement, conducted
by the PSPD (Moon, 2002).
The national minimum movement
Not successful:
• The concept and logic of the term was not clear
• The concept did not become a principle for reform
of social welfare
=> Brought about social and political interests in
terms of the problem of securing the minimum
living standard for low-income groups
The economic crisis in 1997
• A turning point for drawing the attention of people
to the strong necessity of reform of the existing
social safety net
=> One social issue rapidly emerged that resources
should be distributed first to people with lowincome
=> People who live in poverty should be entitled to
a Basic Livelihood Security System provided by
the state
Despite the strengthening of social
protection by the Kim Dae-Jung Govt
• Temporary and stop-gap measures were not enough to
stabilise living standards of low-income households
• Only those under 18 and 65 and over, and unable to
work could claim social assistance… & the benefit
levels had been set at a maximum of 60 % of the
minimum living standards
=> Not only were a large proportion of poorer people
not entitled to benefits, but also the unemployed
worker with the capacity to work did not receive any
benefits at all (Shin, 2000)
The policy initiative came from the
PSPD
• Through a method of appealing to the
general public, the PSPD attempted to
develop the problem of enactment of the
NBLS Act into a social policy issue but…
• The media showed a lukewarm attitude
• Political parties & Govt Depts were not
concerned about the SA reform
New attempt by the PSPD
• 19 NGOs with the PSPD produced their own
NBLS Act bill on 23 July 1998, and submitted the
legislative petition to the National Assembly (NA).
• The bill became the present NBLS Act without
substantial revision
• A series of social movements for passing the bill
continued, centring around the PSPD, such as
declaring the ‘National Right to Welfare’ on 26
Nov. 1998
The NBLS Act bill
• Passed the Legislative Bill Screening SmallCommittee under the NA on Dec. 1998
• The Ministry of Health & Welfare had not
expressed its position toward the bill because of
the delivery system not in place (Lee, 2000)
• The economic ministries clearly opposed its
introduction owing to the policy idea of avoiding
welfare dependency and to the difficulties in
financing the new SA programme (Ahn, 2000;
Kwon, 2003; Moon, 1999)
Forming a new coalition
The coalition of
64 NGOs
Civil rights NGOs
(the PSPD: Co-ordinating agency)
Religious groups
Labour organisations
Women’s groups
Low-income group organisations
Executive Committee
Policy Committee
Chair: Rev. K. Song
Chair: Prof. J. Moon
The coalition
• Aimed at securing the minimum standard of
living for all citizens
• Aimed at establishing a social safety by
enacting a NBLS act
• Conducted an organised nation wide
movement for the enactment of a NBLS Act
at national level, through a method of
appealing to the general public
The coalition urged on the Govt & the
National Assembly:
• a NBLSA should be enacted within the first half of
the year
• the govt should announce an adequate level (as
opposed to the present low level) of the minimum
living standard
• the govt should increase the number of
professional welfare officials (i.e. qualified social
workers) in order for effective implementation of
the NBLS Act (SENBLSA, 1999: 7)
Conflicts bet. the coalition & the govt
• The difficulties in financing - an estimated
expenditure on a new SA programme was bet. 0.8
and 0.6 % of GDP (Moon, 1999)
• The policy idea of avoiding welfare dependency &
workfare
• The chief control dept. MOHW had not shown a
strong positive concern because of lack of the
delivery system
Social assistance expenditures, 1992.
Source: Eardley et al. (1996)
Aus
Ger
Jap
Spa
Swe
UK
US
Total SA
as % of
GDP
6.8
2.0
0.3
1.1
1.5
4.1
3.7
Cash SA
as % of
GDP
6.8
1.6
0.3
1.2
1.5
3.9
1.3
The coalition’s strategy
• Changed from approaching to the public
into both the public and state elites such
as the govt and political parties (Moon,
2002)
• The executive members of the coalition met
core state elites, and explained and
persuaded them of the necessity of the law
(Ahn, 2000)
The public-oriented action plans
revised
• Many statements issued by the coalition from Mar.
to May 1999
• Leaflets produced to strengthen publicity activities
• Education for residents living in low-income areas
who would be the real beneficiaries of the law was
steadily enforced all over the country by local
organisations who were members of the coalition
Coinciding with the coalition’s efforts…
• President Kim Dae-Jung’s announcement of the
adoption of a NBLS Act
• The economic ministries did not oppose the law
• The chief control ministry MOHW showed a
positive and active attitude toward it
=> The bill finally passed the NA on 12 August 1999
Conclusions
• The coalition of 64 NGOs was a main driving
force behind the SA reform
• The determination of President Kim as the most
influential high-level policy-maker in Korea was
another important driving force
• Changes in the economic environment had an
important role in provoking public awareness of
the poverty problem and the necessity of the
reform of the social safety net.
Conclusions
• Most social policy initiatives in Korea came from the
top (Ahn, 2000; Kwon, 2003; Moon, 2002) but…
• The govt has been reluctant throughout the policymaking process of the NBLS Act
• Civil society in Korea has been considerably mature
compared with the civil society under the previous
authoritarian regimes
• => This Korean experience can help us have a deeper
understanding of transitional East Asian welfare
states or welfare regimes
Conclusions
• The NBLS Act has been evaluated as a landmark in
social assistance breaking the Poor Law tradition
• Problems to solve still remain
- benefit levels
- effectiveness of the SA programme
- eligibility criteria (strong family obligations)
- administration and delivery mechanism,
- a workfare policy for able-bodied recipients